Liveblog: Apple's Q1 2013 earnings call on January 23

1) Their last "Genius Bar" commercial was very bad -- it was something that looked like one of Microsoft's past commercials. By contrast, Microsoft's Surface commercials actually made me think the Surface is a neat and cool little device and Samsung's commercials were really well done.

2) Historically, many companies that litigate with patents seem to be on the decline. Atari sued Nintendo before becoming a non-factor in game consoles. Nokia sued Apple when Apple entered the phone market and Nokia soon became a shadow of its former self.

3) I'm actually more interested in getting a Samsung Galaxy phone with Virgin Mobile than an iPhone.

4) Apple's patent litigation makes me dislike them.

5) Their numbers suggest they are losing momentum. They are still the leader but they seem to be losing momentum.

2) Historically, many companies that litigate with patents seem to be on the decline. Atari sued Nintendo before becoming a non-factor in game consoles. Nokia sued Apple when Apple entered the phone market and Nokia soon became a shadow of its former self.

That reeks of selection bias (especially in concert with #4). Patent suits happen a LOT, at healthy companies and at companies in trouble. Yes, when a company is relying on patent suits to keep their profit numbers in the black that is a very bad sign, and will stick out because they constitute such a major [potential] chunk of revenue (so the company execs are going to talk them up more). But Apple’s suits have hardly been of the Hail Mary, bottom-line necessary income variety.

I'm looking forward to this one. All the recent media speculation and rumours-reported-as-facts will be either confirmed or denied. Was the stock market being manipulated, or was it just all about investor fears of a slowdown of growth?

My vote is for manipulation; by spreading sketchy rumors of an Apple sales slump and cuts in iPhone 5 parts orders. Large institutional investors stand to make billions of dollars if Apple had closed at or below $500 by Jan 19th - and guess what, Apple closed at $500. Funny how that worked out so neat and tidy like that.

Nooooooooooooooooooooooo!They would NEVER do that! *rolls eyes*

My bet is that the numbers turn out fine. All the people who bailed on Apple end up looking like fools, while the people who "knew better" end up making some fat cash off the stock downgrade.

At the end of the day, Apple is still making a tidy profit. The stock market is just people betting on how much profit they did/didn't make. It's kinda like people betting on football games. If a team beats the spread, yay! If they don't.... well, doesn't matter that they still WON, they didn't beat the spread.

Apparently the $500 is probably because options expire on the third Friday of the month, which would have been last Friday, when Apple was around $500, and settle at the closest round number, which was $500, hence the $500 valuation.It also happened in September, but no one cared because the stock was so high.

So in a way it is due to banks/etc, but not direct manipulation, more just chance. The neat and tidy comes from the fact options on something like Apple would have a nice round number due to the high price of an individual share. Something like Intel at $22 or so would probably be priced in smaller increments and look more "natural".

My point is not that the share price fell; but, that it fell secondary to what appeared to be strategically placed, poorly researched (ie rumors and innuendo) pieces in the financial and tech media about the "fragility" of Apple. There was a clear pattern of bombing the media with negative Apple stories right up to the expiration of the aforementioned options.

The figures indicate market saturation, and given Apple's rather narrow demographic, it has become saturated quite quickly. They have to decide now whether they're going to be happy with 20% of the high-end market or go after the lower end, which they did with the iPod (Mini, Shuffle etc).

This will all change if they introduce a new products; read: New Apple TV.

The figures indicate market saturation, and given Apple's rather narrow demographic, it has become saturated quite quickly. They have to decide now whether they're going to be happy with 20% of the high-end market or go after the lower end, which they did with the iPod (Mini, Shuffle etc).

This will all change if they introduce a new products; read: New Apple TV.

Yes, because as we can see from Sony, TV's are where its at! Oh...wait...

The figures indicate market saturation, and given Apple's rather narrow demographic, it has become saturated quite quickly. They have to decide now whether they're going to be happy with 20% of the high-end market or go after the lower end, which they did with the iPod (Mini, Shuffle etc).

This will all change if they introduce a new products; read: New Apple TV.

Yes, because as we can see from Sony, TV's are where its at! Oh...wait...

Right... didn't someone say the same thing about tablets this time in 2010?

My point is not that the share price fell; but, that it fell secondary to what appeared to be strategically placed, poorly researched (ie rumors and innuendo) pieces in the financial and tech media about the "fragility" of Apple. There was a clear pattern of bombing the media with negative Apple stories right up to the expiration of the aforementioned options.

2) Historically, many companies that litigate with patents seem to be on the decline. Atari sued Nintendo before becoming a non-factor in game consoles. Nokia sued Apple when Apple entered the phone market and Nokia soon became a shadow of its former self.

That must be why IBM went out of business decades ago and is no longer a force to be reckoned with in the tech market.

Oh wait, the kings of patent litigation are still making money in a way few other companies can match.

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4) Apple's patent litigation makes me dislike them.

You must not like many tech companies because sadly they're all at it.

visiondrawn: What options what on earth are you going on about? How do options expire on a certain day and what conspiracy website have you been reading?

He may or may not have been drinking conspiracy Kool Aid, but you have even less understanding about stock options which most definitely have a expire (AKA maturity) date. The ones in question are talk about here:

Absolutely getting hammered after hours. Look, I don't like Apple, but to drop that much is just asinine and shows that the market is over-reactionary at best. Netflix makes 8 Mil profit and goes up 25% after hours.

Apple down 32.77 currently. I guess a miss is a miss even when you make 13 billion in profit.

You do realise what the market is based on, right?It looks at the future.

The massive drop in margins indicates that the future is not set in stone, as well as the conservative rumoured product pipelines, and the lack of concrete guaranteed growth.

Apple is priced on the market assuming a certain level of growth going forwards. If the earnings indicate there are reasons to be concerned about that growth, share prices drop. It's not over reacting when it was settled around $500 and waiting for the news, good or bad. It wasn't priced for a somewhat negative outlook, or a positive one. Then somewhat negative news came, so it dropped, like it should do.

The irony is that a $550 share price requires Apple post an average of 4% EPS growth for the next five years. Apple just posted over 7%, or almost double, that value so really should be priced at $670, not even counting their real $138 per share cash they have in the bank.

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Also that margin drop is pretty massive, and if they go with "less expensive" iPhones with lower margins than current products, it could look even worse going forwards.A lot of the rumours about Apple indicate they are starting to follow the crowd. Making small iterative changes to products, doing what everyone else is doing with the iPad mini and less expensive phones, increasing the screen size of the iPhone as their "innovation". Rolling out features that are on some products to more in their lineup as their "improvements", rather than adding new things or "inventing" new products like Phablets.

visiondrawn: What options what on earth are you going on about? How do options expire on a certain day and what conspiracy website have you been reading?

He may or may not have been drinking conspiracy Kool Aid, but you have even less understanding about stock options which most definitely have a expire (AKA maturity) date. The ones in question are talk about here:

And 30 year bonds have an expiry date, doesn't mean you can't trade upon them at will. What you are suggesting is there was some grand collusion between the banks and they all did the same thing. Which isn't the case!

The irony is that a $550 share price requires Apple post an average of 4% EPS growth for the next five years. Apple just posted over 7%, or almost double, that value so really should be priced at $670, not even counting their real $138 per share cash they have in the bank.

The assumption that makes them valued “correctly” has to involve further erosion of their profit margins without being able to generate enough gross revenue to maintain that required pace. Not exactly lunacy.

Of course my guess is panic, seeing things headed in the wrong direction on the profit margin, and maybe some technical trading amplifying that effect.

The figures indicate market saturation, and given Apple's rather narrow demographic, it has become saturated quite quickly. They have to decide now whether they're going to be happy with 20% of the high-end market or go after the lower end, which they did with the iPod (Mini, Shuffle etc).

This will all change if they introduce a new products; read: New Apple TV.

Apple was very happy and very profitable with 2ish percent of the high end personal computer market for over a decade. NeXT was well under 1% and still was profitable.

visiondrawn: What options what on earth are you going on about? How do options expire on a certain day and what conspiracy website have you been reading?

He may or may not have been drinking conspiracy Kool Aid, but you have even less understanding about stock options which most definitely have a expire (AKA maturity) date. The ones in question are talk about here:

And 30 year bonds have an expiry date, doesn’t mean you can’t trade upon them at will.

Stock [futures] options are an entirely different thing. When they expire they no longer have any value, they can no longer be used. They allow you to buy, or was case with these ones, sell a stock at a predetermined price. If they are not used by the expiry date they turn into a pumpkin, which is not the case with bonds. EDIT: Well some bonds have special, time limited coupons you can exercise. But that is clearly not what you are talking about.

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What you are suggesting is there was some grand collusion between the banks and they all did the same thing. Which isn't the case!

WTF are you jabbering about? I have said or implied nothing like that (I do not even see where it connects with visiondrawn’s posts). To start with where the hell did you get “banks” from?

Absolutely getting hammered after hours. Look, I don't like Apple, but to drop that much is just asinine and shows that the market is over-reactionary at best. Netflix makes 8 Mil profit and goes up 25% after hours.

Apple down 32.77 currently. I guess a miss is a miss even when you make 13 billion in profit.

How come people don't get it???

The stock value is no bonus for what you earned LAST quarter, it's somewhat of a yardstick of what people expect the company will make NEXT quarter.

Analysts are seeing that Apple increased revenue by 18% but stagnated on profit. This for a company that only sells a handful of products, half of which are competing increasingly against each other (iphone vs ipod, macbook air vs ipad). The Mac line dipped. Tim spent a lot of time explaining it, but still.

Apple is living of 2.5 products and their ecosystem. The ecosystem is worth sh*t once the products go. Analysts are also seeing Apple's unwillingness to introduce a second iPhone, when every market study suggests the majority of smartphone users want bigger screens.

So whether you're holding stock or you're out to buy, you gotta ask yourself: next year, will the company have done better or worse? Will I get my money back or not?

visiondrawn: What options what on earth are you going on about? How do options expire on a certain day and what conspiracy website have you been reading?

He may or may not have been drinking conspiracy Kool Aid, but you have even less understanding about stock options which most definitely have a expire (AKA maturity) date. The ones in question are talk about here:

visiondrawn: What options what on earth are you going on about? How do options expire on a certain day and what conspiracy website have you been reading?

He may or may not have been drinking conspiracy Kool Aid, but you have even less understanding about stock options which most definitely have a expire (AKA maturity) date. The ones in question are talk about here:

No cool-aid here. Thanks for posting the reference. That’s the article I was referring to (couldn’t put my finger on it).

Right now it happens to be screaming “Ooooh yeeeahh!” while busting through a brick wall. I tried to explain this to Gruber, too. Those options may very well have been the floor holding the price up to something that would have happened anyway, rather than a particularly successful eating of itself.

Here is the thing, it is quite hard to be [rationally] really upbeat about AAPL at the moment. Certainly not overly exuberant $700 upbeat. So what kicks in is the downside of being a highly exposed/overexposed company. When the hype machine turns on you, it does not really need a conspiracy to create a spate of negative press and bearish outlooks. *shrug*

This is an entirely normal tech stock cycle. Until Apple shows that they can deliver on their Next Big Thing (major product line) there is nervousness that curbs stock price.

The figures indicate market saturation, and given Apple's rather narrow demographic, it has become saturated quite quickly. They have to decide now whether they're going to be happy with 20% of the high-end market or go after the lower end, which they did with the iPod (Mini, Shuffle etc).

This will all change if they introduce a new products; read: New Apple TV.

Apple was very happy and very profitable with 2ish percent of the high end personal computer market for over a decade. NeXT was well under 1% and still was profitable.

CHEEP IPHONEZ is xMac all over again.

I actually agree with you, but there is a big difference between "cheap" and "affordable".

The iPod shuffle was affordable, but hardly cheap (compared to products offering similar functionality). I don't know if Apple would really benefit from bifurcating their iPhone product line, but an 'iPhone Nano' or equivalent doesn't have to be "cheap" but to break into the emerging markets, it needs to be affordable.

1) Their last "Genius Bar" commercial was very bad -- it was something that looked like one of Microsoft's past commercials. By contrast, Microsoft's Surface commercials actually made me think the Surface is a neat and cool little device and Samsung's commercials were really well done.

2) Historically, many companies that litigate with patents seem to be on the decline. Atari sued Nintendo before becoming a non-factor in game consoles. Nokia sued Apple when Apple entered the phone market and Nokia soon became a shadow of its former self.

3) I'm actually more interested in getting a Samsung Galaxy phone with Virgin Mobile than an iPhone.

4) Apple's patent litigation makes me dislike them.

5) Their numbers suggest they are losing momentum. They are still the leader but they seem to be losing momentum.

Apple decline is happening as we speak, stock drops 12% in a single day is a big deal.

Apple you used to be cool, rebellious, underdog and I rooted for you but now, you're a big bully, and your products is boring, and overpriced. I jumped from the iPhone 4s to the Samsung Galaxy S3 and never look back, it's a better phone all around and I'm sick and tired being controlled by the Apple wall garden.

My wife still has the iPhone 4S, I asked if she wanted to upgrade to the 5, but then after having a look at it at the store, she told me, the phone is ugly, feel cheap and boring.... told her, let's wait for a few months for the Galaxy S 4

I dislike Ars covering earnings calls. I don't care which company is up for consideration. This information is very much a distraction. I go to financial websites when I desire coverage on this information.

Well, there is an easy solution to that. The first step is to not click on the article. There is no second step.

Or have the writing staff put their time and effort into something else more interesting?

Apple is doing a good job hopping on the success of its creator. I'm quite surprised its products still continue to churn out so much demand, that even technical services are coming up specialized for Apple stuff, like http://www.pam.cl/.

It is awful all the money Apple is getting in their pockets. They should go into the MLM business, imagine apple paying you per every iPad, iPhone or Mac that you sell, per every person you bring to the business and per every device that people sell also !!! It could be awesome. At least we can do it now with Solavei where you are gonna have unlimited voice, text and data in a 4G nationwide network with no contract for $49 or less. That "less"means you can have unlimited everything where 4gigs running at 4G are included and the possibility to bring you monthly payment to $0 forever or even get paid for the company. Well, if you have an iPhone 5, you need to wait until March went the nano sim is gonna be available. Any one with GSM phones including iPhones up to 4S can do it now, check it out: www(.)myphonepaysback(.)com